Charting the Path to Universal Financial Inclusion

July 14, 2023

Read Part 1, From Exclusion to Empowerment: The Meaning of Financial Inclusion

The Cost of Financial Exclusion of Women

Despite women’s increasing influence in the global economy and their significant contribution to consumer spending, the fact remains that nearly a billion women worldwide are unbanked and lack access to essential financial services. There exists a substantial global revenue opportunity of at least $700 billion in better serving women as customers. However, they continue to be among the most underserved customer groups in the financial services industry.

This undeniable reality underscores the urgent need for universal financial inclusion, ensuring that all women have equitable access to affordable and comprehensive financial products and services provided by responsible and sustainable institutions. Bridging this gap necessitates addressing the diverse challenges women encounter, including regulatory barriers, social and cultural norms, and the absence of customized financial solutions.

Driving Progressive and Inclusive Policy Initiatives

Governments hold a pivotal position in dismantling barriers to financial inclusion through the implementation of laws and policies that bolster economic opportunities for women and reduce inequalities. However, less than 35% of countries have established a national financial inclusion strategy. Inclusive policies and regulations are essential to increase access to formal financial services in underserved populations, promote fair practices, and curb market manipulations.

By prioritizing and implementing inclusive policies, governments can enable inclusive financial ecosystems that benefit women, women-led enterprises, and economies at large. If governments across the world incorporate financial inclusion as a policy objective, then global challenges such as barriers on the supply side and demand side, and inadequate regulatory frameworks can be rightly addressed. Inclusive policies such as requiring banks to provide basic accounts to their customers can prove to be beneficial.

In this digital age, governments have a big role to play in enabling an environment that leverages technology to expand financial access. Promoting digital financial services especially when it comes to social transfers, wages, and pension payments can bridge the gap for individuals who lack access to traditional banking services by offering convenient and secure ways to participate in the financial system with increased flexibility.

Enhancing Financial Literacy and Education

Empowering individuals, particularly women, through enhanced financial literacy in areas such as budgeting, saving, and responsible borrowing, can equip them with the knowledge and skills needed to make informed financial decisions. This, in turn, enables them to provide greater support to their families and contribute positively to their communities.

Women’s World Banking has developed a comprehensive framework consisting of five essential principles that can shape impactful initiatives to enhance financial literacy and capability. These key principles include defining the segment of women the initiate would target, developing a clear and focused learning objective, identifying the stage of the target customer’s journey at which it is most impactful to engage her, choosing the delivery channels that can most effectively reach the target segment of women, and developing the content in a way that facilitates behavioral change. This women-centered framework serves as a valuable resource for financial inclusion stakeholders and practitioners, enabling them to ensure effective learning and delivery methods to maximize their impact.

Customer Protection and Gender-Disaggregated Data

Customer protection is pivotal in building trust and ensuring the integrity of financial systems. Governments and regulatory bodies must establish robust consumer protection frameworks that safeguard individuals from predatory practices, fraud, and misconduct. These measures include clear disclosure requirements, fair dispute resolution mechanisms, and regulations to prevent discrimination and exploitation. By promoting transparency, accountability, and ethical behavior among financial service providers, customers can confidently engage with financial services, leading to increased uptake and sustained usage.

Gender-disaggregated data allows us to better understand the unique financial disparities faced by women. Through gender disaggregated data, governments and stakeholders can effectively design targeted interventions. Governments and organizations must prioritize the collection and analysis of gender-specific data to identify gaps, disparities, and barriers that hinder women’s financial inclusion. This data-driven approach facilitates the development of tailored products, services, and policies that address women’s specific needs and promote their financial empowerment. It also enables the evaluation of progress and the measurement of the impact of interventions on women’s financial inclusion.

Achieving universal financial inclusion requires collaborative efforts to increase access and usage of financial services. By building a robust financial infrastructure, promoting digital financial services and inclusive policies, enhancing financial literacy, fostering public-private partnerships, and addressing gender disparities, governments and stakeholders can pave the way towards inclusive financial systems. Universal financial inclusion unlocks immense potential, empowering individuals, fostering economic growth, and creating a more equitable society. Through collaborative and innovative approaches, we can turn this vision into reality, ensuring that no individual is left behind in the journey towards financial well-being.

Women’s World Banking aims to engage 20 government or regulatory agencies to implement gender inclusive policies and initiatives to improve women’s access and usage to the formal financial system. Download our 2022 Impact Report to see our progress, and learn how to support our policy work.